Hello, We are 3 persons located in 3 different countries and we develop a software and i was wondering how should we pay tax and to who we can pay tax for the money that is received for the softwares we sell to our clients all over the world. We are not a company yet and i was wondering if i can pay tax to one of the 3 countries and ignore tax from my country, or can i pay tax to U.S (forth country) and ignore tax from my country? Additional question is: Can i register a company in a country (U.S) even though i am not a resident of that country and neither one of my partners. And can i also under that condition pay tax to that country and ignore tax from my own country. Also what are the requirements to pay tax (annual / monthly income? ) Robert
That is a loaded questions and would depend on the countries you are in. In general, I think that each person would pay tax to the country they are located in on the income that they receive. The business itself would have to comply with the tax laws in the country where the business was formed. As far as US, why would you want to do that? There are ways to form a foreign corporation but it would ad a huge layer of complexity and I am not sure what benefits you would get from that.
The best way to address your issue is to first ask you what country you are in? You should incorporate your business in the country you are in and not the U.S. If you search online, you will find out that you can incorporate in delaware even though you are not in the U.S. You have to pay an annual fee of local registered agent and pay the state of delaware $35 franchise tax. On top of that, you pay 35% of what you earn to IRS (U.S Govt).
You can get an EIN form the United States pretty easily, but why do you want something from the United States in which it might cause you to pay taxes to the United States government? (Sorry just a bit bitter knowing we have to pay $70,000 in taxes this year.)
You can register the company itself offshore, avoiding all company taxes. Then legally, you should pay tax in your own country from your share of the profits. If you want an offshore company with a bank account I'll sell you one for $1800. (I work for a company that incorporates them).
International tax is tricky... I do a bit of this work myself for Irish and Canadian entrepreneurs who operate in the US. I would think you'd want to be careful about setting up a partnership because I'll bet that creates nexus (i.e. tax liability) in all of the countries in which a working partner resides. I will note that taxation in your situation is tricky not just because you've got three countries tax laws to think about but also the tax treaties between these countries.